John G. was fired from his job 2 years ago when his manager found out he had AIDS. He filed an employee discrimination lawsuit against the company where he had been working for almost a decade. The company offered a settlement of $55,000 which is commensurate to a 1 year salary but he believed he deserved a lot more so he declined the offer. Unable to find a job since, he spent all his life savings and was about to lose his home to foreclosure until he found a pre settlement loan provider. His lawsuit helped John reach a settlement of $550,000. He paid the lender $35,000 plus interest and fees which left him with a little over $500,000 in the bank.
Had John not availed this loan, he would have had to face two scenarios:
1. He would have accepted the initial offer of $55,000.
2. He would have declined the initial offer but lose his home and file for bankruptcy.
Fortunately, John made the right decision in opting for a pre settlement loan.
The main benefit of this type of loan is that it’s a no-risk litigation funding for the borrower. If you have exhausted all options and still could not get the financial assistance you need to pay for your bills and living expenses, then getting a pre settlement loan would be a practical option. Sure, there are high interest rates and fees but the benefits far outweigh the cons.
Think about it. You will have the funding you need to keep your home, put food on the table and pay for your medical bills. If you lose the case, you owe the lender nothing! If your settlement is lower than anticipated, you don’t have to pay the lender more than your settlement amount.
The key here is in finding the right lender that offers this kind of loan. You have to ask these questions:
1. Do you charge application fees? A reputable lender would never charge upfront fees. If they do, request that this fee be waived.
2. How much are your interest rates? Is the rate compounded? Many companies may advertise unbelievably low interest rates but they compound the interest, so you’re still paying more money in the end.
3. Is there a cap on your rates? Some lenders stop adding fees after a period of time.
Other Tips to Keep in Mind
Before applying for a pre settlement loan, it’s always recommended that you check other financing options first. This should be your last resort. If you’ve determined that this is the most practical option for you, find a lender that offers fair rates, does not charge upfront fees, and are able to assist you in the best ways possible.
Litigation is never a simple matter. It entails a lot of waiting and a lot of hardships. But with the right financial assistance, you will be able to get the compensation you deserve while avoiding headaches and money-related problems.
